En este capítulo es muy interesante porque en ello se aplicara una guía didáctica desollada con mucho esmero y esfuerzo de quienes
JUEGOS DE PALABRAS Actividad
Remuneration of key management personnel, including amounts paid to the Company’s directors as disclosed in Note 17(a) and certain of the highest paid employees as disclosed in Note 17(b), is as follows:
2015 2014
HK$’000 HK$’000
Short-term employee benefits 11,750 5,911
Retirement benefit schemes contributions 135 60
Equity-settled share-based payments 3,948 1,067
15,833 7,038
48. EVENTS AFTER THE REPORTING PERIOD
The Group had the following material events subsequent to the end of the reporting period and up to the date of approval of these financial statements:
(a) On 20 April 2015, Union Grace Holdings Limited (“Union Grace”), an indirect
wholly-owned subsidiary of the Company, entered into a sale and purchase agreement with Cherrylink Investments Limited (“Cherrylink”), a wholly-owned subsidiary of CGL, pursuant to which Union Grace conditionally agreed to sell and Cherrylink conditionally agreed to purchase 25% of the issued share capital of Synergy Dragon Limited (“SDL”), an indirect wholly-owned subsidiary of the Company. In accordance with the terms and conditions thereof, the consideration for the transaction is HK$750,000,000, which shall be satisfied by convertible bonds with 8% coupon per annum to be issued by CGL to Union Grace (or its nominee) on the completion date. As at the date of this report, the transaction has not yet completed. Following completion, the issued shares of SDL will be owned as to 25% by CGL and as to 75% by Union Grace. SDL and its subsidiaries are principally engaged in research and development, production and sales of lithium-ion batteries and its related products.
(b) On 29 April 2015, the Company entered into a placing agreement with the placing agent to
place up to 150,000,000 shares of CGL, representing approximately 15.99% of issued share capital of CGL, held indirectly by the Company to parties independent from and not a connected person to the Company at a placing price of HK$1.70 per share. On 7 May 2015, 150,000,000 shares of CGL held indirectly by the Company had been placed through the placing agent to not less than six placees who are neither connected persons of the Company nor parties acting in concert with the Company, at the placing price of HK$1.70 per share. The net amount of approximately HK$248,600,000 was raised by the Group. After the placing, the shareholding of the Group in CGL decreased from approximately 89.54% to approximately 73.55%.
Accordingly, the Company and Smith entered into the FDG contribution agreement and the Smith contribution agreement with the JV respectively. Pursuant to the FDG contribution agreement, the Company has conditionally agreed to (i) enter into the licence agreement pursuant to which the Company will contribute, convey, assign, transfer and deliver the exclusive right to use the Group’s current design specifications for passenger van, mini bus, panel van and cab/chassis and their respective variations in the US (including 50 states, the District of Columbia, Puerto Rico, Guam and the American Virgin Islands) (collectively, the “Territory”) and provide relevant engineering access and support to the JV in accordance with the terms and conditions therein; (ii) enter into a battery supply agreement no later than 30 June 2015; (iii) enter into the semi knock down kit (the “SKD Kit”) supply agreement no later than 30 June 2015 with an expected demand for the SKD Kits of 3,000, 5,000, 10,000 units in the calendar year 2016, 2017 and 2018, respectively; (iv) contribute US$5,000,000 in cash to the JV; and (v) contribute an additional US$10,000,000 in cash to the JV upon, inter alia, the execution of the battery supply agreement and the SKD Kit supply agreement (collectively, the “FDG Contributed Assets”), and the JV has conditionally agreed to issue an aggregate of 22,500,000 shares to the Company (or its nominee) upon the closing of the contributions of the FDG Contributed Assets and/or the Smith Contributed Assets (as defined below) as specified in the FDG contribution agreement and/or the Smith contribution agreement (the “Effective Time”). Pursuant to the Smith contribution agreement, Smith has conditionally agreed to contribute, convey, assign, transfer and deliver to the JV (i) an exclusive licence for the use of the Smith intellectual property (including all know-hows and trade secrets) in the Territory; (ii) an exclusive licence for the use of the brand “Smith” and all related goodwill in the Territory; (iii) the executed original equipment manufacturing supply agreement no later than 30 June 2015; (iv) the exclusive sales and distribution rights of electric vehicles in the Territory; (v) the exclusive rights to form a battery rental business in the Territory; (vi) goodwill including but not limited to Smith’s customers; and (vii) executed offer letters from certain employees (collectively, the “Smith Contributed Assets”), and the JV has conditionally agreed to issue 20,000,000 shares to Smith upon the Effective Time.
Up to the date of this report, the JV has been formed in the US and contributions of the FDG Contributed Assets were completed save for the contribution of the additional US$10,000,000 in cash, and the execution of the battery supply agreement and the SKD Kit supply agreement between the Company and the JV. The agreements are still under negotiations and the signing deadlines of which have been extended. In addition, the contributions of the Smith Contributed Assets were completed save for the execution of the original equipment manufacturing supply agreement between the JV and Smith. It is still under negotiations and the signing deadline of which has been extended.
(d) On 29 June 2015, the Board proposed to reduce the entire amount standing to the credit of
the share premium account of the Company to nil (the “Share Premium Reduction”) and part of the credit arising from the Share Premium Reduction will be applied to offset the entire amount of the accumulated losses of the Company and the remaining balance will be credited to the contributed surplus account of the Company. The Share Premium Reduction is conditional upon, inter alia, the passing of a special resolution by the shareholders at the coming annual general meeting and compliance with the relevant law and regulations. Further details are set out in the Company’s announcement dated 29 June 2015.
49. CAPITAL MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt
The management of the Group reviews the capital structure and considers the cost of capital regularly. The Group considers the cost of capital and the risks associated with each class of capital, and will balance its overall capital structure through the payment of dividends, issue new shares as well as the raising of debts and bank borrowings. No material changes were made in the objectives, policies or processes during the years ended 31 March 2015 and 2014.
Neither the Company nor any other subsidiary is subject to externally imposed capital requirements.
The Group monitors its capital structure on the basis of net debt to equity ratio, which is net debt divided by capital. Net debt includes the Group’s total borrowings (including bank loans and other borrowings, loan from a holder of non-controlling interests and obligations under redeemed convertible bonds) less cash and cash equivalents and deposit in a security account as shown in consolidated statement of financial position. Total capital includes all components of equity attributable to owners of the Company and the liability components of convertible bonds. The net debt to equity ratio as at end of the reporting period is as follows:
2015 2014
HK$’000 HK$’000
Bank loans and other borrowings 880,203 372,181
Loan from a holder of non-controlling interests – 150,000
Obligations under redeemed convertible bonds
(Note) 760,752 760,752
Total borrowings 1,640,955 1,282,933
Less: Cash and cash equivalents (411,478) (1,069,623)
Deposit in a security account (320,019) –
Net debt 909,458 213,310
Total equity attributable to owners of the Company 2,071,146 1,733,800
Liability components of convertible bonds 1,156,011 –
Adjusted capital 3,227,157 1,733,800
Net debt to equity ratio 28% 12%
Note: Based on a court judgment dated 5 March 2013, the Group has been given an unconditional leave to defend to the extent of the Set-Off (as defined in Note 37) and based on which, the Group is entitled to a stay of execution of payment for the obligations under the redeemed convertible bonds before the conclusion of relevant legal proceedings.
50. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform with current year’s presentation.